In accordance with the objectives of monetary policy, financial stability, and efficient operations of currency and payment systems, the Reserve Bank of India said that it is contemplating adopting a graded approach to the rollout of Central Bank Digital Currency (CBDC).
In its annual report of 2021-22, the Reserve Bank of India said, “The Reserve Bank proposes to adopt a graded approach to the introduction of CBDC, going step by step through stages of proof of Concept 12, pilots and the launch.”
The RBI has been prospecting the advantages and disadvantages of the initiation of CBDC in India and the relevant design elements of CBDCs that could be put into practice with little or no retardation are under scrutiny.
It also said, “The Reserve Bank is engaged in the initiation of a central bank digital currency in the country. The design of CBDC requires to be in congruence with the stated objectives of monetary policy, financial stability and efficient operations of currency and payment systems.”
The central bank stated that the introduction of CBDC had been revealed in the Union Budget 2022-23 and an absolute amendment to the RBI Act, 1934 has been included in the Finance Bill, 2022. Offering a legal configuration for the launch of CBDC, the Finance Bill 2022 has been validated.